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nVent Electric PLC (NVT) Hits Fresh High: Is There Still Room to Run?
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Have you been paying attention to shares of nVent Electric (NVT - Free Report) ? Shares have been on the move with the stock up 4% over the past month. The stock hit a new 52-week high of $40.69 in the previous session. nVent Electric has gained 5.1% since the start of the year compared to the 15% move for the Zacks Computer and Technology sector and the 15.4% return for the Zacks Electronics - Miscellaneous Components industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 7, 2023, nVent reported EPS of $0.66 versus consensus estimate of $0.59.
For the current fiscal year, nVent is expected to post earnings of $2.50 per share on $2.87 billion in revenues.
Valuation Metrics
While nVent has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
nVent has a Value Score of B. The stock's Growth and Momentum Scores are B and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 16.2X current fiscal year EPS estimates, which is not in-line with the peer industry average of 18.7X. On a trailing cash flow basis, the stock currently trades at 15.2X versus its peer group's average of 13.6X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, nVent currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if nVent fits the bill. Thus, it seems as though nVent shares could have potential in the weeks and months to come.
How Does NVT Stack Up to the Competition?
Shares of NVT have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is TDK Corp. (TTDKY - Free Report) . TTDKY has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of F, and a Momentum Score of C.
Earnings were strong last quarter. TDK Corp. beat our consensus estimate by 5.68%, and for the current fiscal year, TTDKY is expected to post earnings of $3.30 per share on revenue of $17.23 billion.
Shares of TDK Corp. have gained 9.4% over the past month, and currently trade at a forward P/E of 11.69X and a P/CF of 4.95X.
The Electronics - Miscellaneous Components industry may rank in the bottom 62% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for NVT and TTDKY, even beyond their own solid fundamental situation.
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nVent Electric PLC (NVT) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of nVent Electric (NVT - Free Report) ? Shares have been on the move with the stock up 4% over the past month. The stock hit a new 52-week high of $40.69 in the previous session. nVent Electric has gained 5.1% since the start of the year compared to the 15% move for the Zacks Computer and Technology sector and the 15.4% return for the Zacks Electronics - Miscellaneous Components industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 7, 2023, nVent reported EPS of $0.66 versus consensus estimate of $0.59.
For the current fiscal year, nVent is expected to post earnings of $2.50 per share on $2.87 billion in revenues.
Valuation Metrics
While nVent has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
nVent has a Value Score of B. The stock's Growth and Momentum Scores are B and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 16.2X current fiscal year EPS estimates, which is not in-line with the peer industry average of 18.7X. On a trailing cash flow basis, the stock currently trades at 15.2X versus its peer group's average of 13.6X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, nVent currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if nVent fits the bill. Thus, it seems as though nVent shares could have potential in the weeks and months to come.
How Does NVT Stack Up to the Competition?
Shares of NVT have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is TDK Corp. (TTDKY - Free Report) . TTDKY has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of F, and a Momentum Score of C.
Earnings were strong last quarter. TDK Corp. beat our consensus estimate by 5.68%, and for the current fiscal year, TTDKY is expected to post earnings of $3.30 per share on revenue of $17.23 billion.
Shares of TDK Corp. have gained 9.4% over the past month, and currently trade at a forward P/E of 11.69X and a P/CF of 4.95X.
The Electronics - Miscellaneous Components industry may rank in the bottom 62% of all the industries we have in our universe, but there still looks like there are some nice tailwinds for NVT and TTDKY, even beyond their own solid fundamental situation.